In June, Grubhub senior vice president Kevin Kearns defended the commissions and fees to the City Council small business committee, saying his company spends $60 million a year to promote its clients. It also tries to “upsell” orders to raise take-out bills, he said.
“For example, if you’re ordering a cheeseburger in a restaurant, the server isn’t always exactly saying, ‘Do you want bacon on that? Do you want avocados on that?”’ he said, adding that Grubhub’s 115,000-customer database means it’s “actually driving more customers through restaurant doors and having that dine-in experience.”
That conflicts with the City Council’s research, which found a 3% drop in in-house dining in restaurants with app-based services.
As delivery companies take control of the food-order market they obtain data on thousands of customers -- their email and home addresses, phone numbers, favorite foods and credit cards -- which gives them leverage over restaurant owners who might want to discontinue their use of the app.
“We’re finding that a food app could come in and actually take over your business,” said Gjonaj, who spent his youth delivering food and later managing a Bronx pizzeria. “The websites control all the customer sales data and don’t share it, and that gives them the power to undermine your existence and take away customers if you decide to end the deal.”
At Nanoosh, a Mediterranean restaurant near Manhattan’s Union Square, where about half its business is in take out and delivery, monitors displaying a dozen app-based services crowd the desk near the cash register. Commissions for each order range between 20% and 30%, said manager Israel Gutama.
“It’s too much but if we don’t use them our competitors will, and we can’t afford to lose customers,” he said.
This article was provided by Bloomberg News.